by Cai Haoxiang, newsroom intern

A NUMBER of ministries are leaving their land and buildings vacant for too long and missing out on rental money, the Auditor-General's Office (AGO) said in its latest report.

The report added that there is 'a need for ministries and statutory boards to effectively manage their properties so as to maximise their usage for the public good'.

Auditor-General Lim Soo Ping, in his overview of its latest report for 2007/2008 submitted on 1 Jul, cited four examples where land and buildings were not used enough.

One was the former Catholic High building, at 222 Queen Street, which was left vacant for more than seven years after it was allocated to the Ministry of Information, Communications and the Arts (Mica) in September 2000.

The National Heritage Board (NHB) was supposed to develop the building as an art gallery for local artists.

However, for four years till 2004, NHB's development plans did not meet with Mica's approval..

In 2004, NHB decided to consider another building in the area.

For the next three years, Mica explored possible uses of the building with interested parties but none of the proposals materialised.

The building was returned to the Singapore Land Authority (SLA) in March 2008.

OPPORTUNITY COST

The opportunity cost forgone in rental revenue for the building was estimated by the report to be $420,000 a year, based on rental rates for institutional use.

Over seven years, the rental revenue forgone amounted to nearly $3 million.

Mr K H Choy, who runs RichPlan Property Services, said: 'It's never a good thing to leave a building empty as income is being lost.

'However, there are also considerations that the space has to be rented out to the right people.'

Responding to the report, a Mica spokesman said that it was aware of the opportunity costs of vacant properties, which was why the building was returned to SLA this year.

As the former Catholic High is in the Arts and Civic District earmarked for arts, heritage and civic activities, Mica's plan was to 'provide housing for compatible arts groups under one roof' to add to the buzz of the area.

The ministry worked with several agencies to pursue different proposals for the site. But the various options were considered 'not feasible'.

Several other ministries and statutory boards also came under fire for poor building management.

The Public Service Division (PSD) did not let out six of its 45 holiday chalets for 14 years since 1993.

The chalets are now in a dilapidated and uninhabitable state with broken doors, broken sinks and leaking roofs, the report said.

When contacted, PSD's director of personnel policy, Ms Bernadette Sim, said that demand for the six chalets had been very low because of their location.

There was no commercial viability in PSD operating the chalets for civil servants, hence they were left vacant pending redevelopment plans for the area.

She agreed that there could have been better management of those six chalets and steps are being taken to return the land and buildings to SLA.

The report also said Temasek Polytechnic needs to be more proactive in renting out its three apartment blocks.

The average vacancy rate for the apartments in the last three years was 65.2 per cent. If the vacancy rate was 25 per cent for 2007, an additional $342,000 in rental could have been collected.

The polytechnic has since informed AGO that it is exploring opening the apartments up to other categories of users.

SLA was cited for not having tight enough controls on the reservation of state properties.

There was no cap on the reservation period or a cost or penalty to the agency making the reservation.

NO INCENTIVE

The report said: 'Agencies have no incentive to exercise care in making reservations with due regard to opportunity cost to the Government.'

In a test check of 10 reserved properties, five were left vacant for three to six years.

The Ministry of Law and SLA informed AGO that they had been working with the Ministry of Finance to introduce a reservation framework for state properties.

Auditor-General Lim said that lapses reported should not be seen as a reflection of the state of the governance of the organisation as a whole.

'Even in an organisation with good governance and management practice, lapses do occur occasionally,' he said.

This article was first published in The New Paper on July 22, 2008.